The New America Foundation and Slate Magazine is presenting a forum on Friday April 2nd in D.C. entitled: “Why your cell phone is so terrible” featuring:

  • New America Fellow and FreePress Chairman Tim Wu, the leading proponent of imposing monopoly-era Carterfone regulations and net neutrality on the competitive wireless industry, and whose research conclusions and predictions have not been able to withstand scrutiny or the test of time; and
  • New America Director and FreePress alum Sascha Meinrath, a leading proponent of not-for-profit, municipal/community-run wireless networks, which to date have almost universally not succeeded. (Full disclosure: Mr. Meinrath railed against NPR for running my net neutrality op-ed last fall, and I rebutted his broadside.)

Given that the New America Foundation and Slate appear either afraid or unwilling to hear opposing views in their “panel discussion” and have not invited a representative of the wireless industry to rebut the ridiculous premise of this “panel discussion,” let me take this opportunity to systematically rebut this ridiculous and un-supportable assertion: “Why your cell phone is so terrible” here.

If American cell phones and service are indeed “so terrible”…

Why most competitive?

  • Why would former Vice President Gore say in 2009 that the U.S. has “the most competitive wireless industry in the world?” Why would the facts be that Americans enjoy the least concentrated and most competitive wireless market of the 26 OECD countries? (FCC filing)

Why huge growing demand?

  • Why have Americans bought 200 million more wireless connections over the last decade and 10 million more over the last year? (CTIA Stats)

Why huge growing usage?

  • Why would Americans’ usage of cellphones have increased over 1,000% over the last ten years and why would Americans use 2-4 times more wireless minutes than consumers of any other OECD country? (CTIA Stats and FCC Filing)

Why lowest prices?

  • Why would Americans enjoy the lowest price per minute for wireless service in the OECD, 60% lower than the average OECD country? (FCC filing)

Why most application choice/innovation?

  • Why would Americans have access to well over 100,000 mobile applications on multiple growing mobile application platforms?

Why most handset choice?

  • Why would Americans have the choice of 630 different wireless handsets (29 WiFi-enabled) from 33 different manufacturers? (FCC filing)

Why most advanced networks?

  • Why would the U.S. lead the world in 4G WiMax deployment and lead in time-to-market of 4G LTE broadband service and deployment of 700 Mhz DTV spectrum for broadband?

Why highest complaint resolution?

  • Why does the Better Business Bureau report in 2009 that 97.4% of wireless customer complaints were resolved, which is the highest resolution rate of any of the top 10 categories that the Better Business Bureau tracks?
  • Moreover, why would the latest FCC complaint data show wireless generating only 12% of consumer complaints to the FCC? (FCC complaint database)
  • Furthermore, why would consumer complaints to the FCC about wireless industry-specific issues, that the wireless industry can control and resolve, represent only 16 complaints per one million users, or a wireless complaint rate of .0016%? (FCC complaint database)
So what is “so terrible” here about American cellphones or service? Nothing but New America’s hyperbole.

  • The obvious conclusion is that if something is really “terrible” here, it is not the performance of the U.S. wireless industry, but it is the research conclusions of the New America Foundation’s about the U.S. wireless industry.
  • Lastly, the New America Foundation’s research conclusions are obviously not credible because they are not supported by the data, evidence, or competent analysis.

 

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Yale University has postponed its adoption of Gmail in part because of concerns that Google will/can not tell Yale where or in what country their private information/data will be stored — per Yale Daily News.

 

  • Google stores every piece of data in three centers randomly chosen from the many it operates worldwide in order to guard the company’s ability to recover lost information — but that also makes the data subject to the vagaries of foreign laws and governments, [Yale computer science professor Michael] Fischer said. He added that Google was not willing to provide [Yale] ITS with a list of countries to which the University’s data could be sent, but only a list of about 15 countries to which the data would not be sent.”
 

It appears that Google continues to organize information for the benefit of Google’s own engineering efficiency, simplicity and convenience — without regard to what is best or safest for its users.

  • WHERE users private data is stored by Google has immense implications for users’ privacy, security and whether or not their private data/communications are vulnerable to subpoena, with or without their knowledge.

This is further evidence of Google’s cavalier approach to privacy and security of users.

Google continues to send very mixed messages to the world about Internet freedom.

While Google’s PR machine has focused world attention on it’s decision to stop censoring its search results in China, (which I commend Google for finally fulfilling), Google has downplayed its activist lobbying of governments around the world to mandate national net neutrality restrictions on the Internet.

  • Like a ten-year-old that plays with matches and starts a fire he can’t control… Google has been lobbying foreign governments hard to preemptively restrict Internet behavior, but when China continued to restrict Internet behavior the way it always had, Google claimed to be shocked, shocked, that a nation would restrict the Internet in their own national way and for their own national purposes and not the way Google wanted them to restrict Internet behavior…

Think about it. Is there any more mixed message than Google asking a foreign government to mandate a restrictive national net neutrality law or regulation to preserve Google’s “innovation without permission” ethos?

  • Don’t regulations and laws generally restrict freedoms and require permissions from Government — not the other way around?

Isn’t Google also sending mixed messages by proactively asking governments around the world to assert their national sovereignty and mandate new net neutrality Internet restrictions for their particular nation, but then withdrawing from a market like China, precisely because they have asserted their national sovereignty to impose Internet restrictions?

Google’s actions in China have others wondering where all this will lead:

  • A New York Times editorial: “Google searches for a foreign policy” — actually encourages Google to have its own foreign policy.
  • An excellent analysis in the Financial Times by Richard Waters and Joseph Menn, “Closing the frontier” spotlights that “the world wide web is becoming balkanised” as governments increasingly attempt to assert control over the Internet.

The big takeaway here is that Google and others lobbying foreign governments to preemptively mandate net neutrality restrictions in the name of an Open Internet are unwittingly accomplishing the exact opposite of their stated goals.

  • The naive assumption of net neutrality proponents is that foreign governments will change their laws and regulations to advantage and permanently entrench dominant American web companies and American interests.
  • The cold reality is that many foreign governments will use the net neutrality call for government action as political cover to advance their own national economic/cultural interests — with the unfortunate destructive result of balkanizing the current near universal Internet.

In a remarkably ill-advised and irresponsible blog post, Mr. Feld of Public Knowledge attacked the State Department’s Ambassador Phil Verveer for apparently veering from the strict orthodoxy of FreePress/Public Knowledge’s view of net neutrality.

  • Ambassador Verveer was merely doing his job and speaking freely and forthrightly that other countries will obviously be watching what the FCC does, given that the U.S. has led communications-competition policy for two decades.

First, everyone who knows Phil (and I have had the pleasure of knowing him for almost twenty years), knows Ambassador Verveer to be one of the most honorable, wise, measured, and capable professionals and public servants they know, period, full stop.

Second, it is exceptionally bad form and hypocritical for net neutrality proponents who claim the moral/ethical basis of net neutrality is all about Internet Freedom, Freedom of Speech, and that net neutrality is the First Amendent of the Internet, to quarter absolutely no dissent from the radical FreePress/Public Knowledge strict orthodoxy on net neutrality.

  • Does Mr. Feld somehow imagine that no one: is watching; understands what Freedom of Speech really means; and recognizes the hypocrisy here?
  • Isn’t walking one’s talk central to credibility?
Third, Mr. Feld apparently does not realize that Ambassador Verveer has a very different job/role than does the FCC, an independent agency. The FCC’s job/role is to implement the law and balance the myriad of ever-changing developments, requests, challenges and constituency interests within the confines of the law and its statutory authority.

  • The State Department’s role as the first and oldest of U.S. Government functions, is to protect and promote U.S. interests around the globe and listen and communicate back what Nations around the world are telling us.
    • Ambassador Verveer has an exceptionally difficult job/role. I know first hand. I was a Deputy U.S. Coordinator for Communications Policy in the first Bush Administration, the deputy level to the position Ambassador Verveer now holds.
  • Ambassador Verveer would not be fulfilling his oath of office nor serving the Nation he swore to protect, if he were to adopt the Feld-ian expectation of blind fealty to FreePress’/Public Knowledge’s radical net neutrality orthodoxy.
  • Ambassador Verveer has a job to do and that is to report back to the Secretary of State, the President of the United States, and the FCC what the rest of the world is asking, thinking and concluding about what the U.S. is contemplating to do and actually doing.
    • Mr. Feld’s shoot-the-messenger approach because he does not agree with the message, is especially ironic in this case given that diplomats have been afforded safe passage and immunity for parts of three millenia.
    • Is Mr. Feld’s myopia and radicalism in pursuit of his net neutrality goal so blinding that he can not see the almost universal and timeless recognized value of unfettered international diplomacy and the protection of diplomats from intimidation, interference or harm?

Fourth, Mr. Feld’s seriously out-of-bounds attack on Mr. Verveer appears designed to try and intimidate and muzzle any voices that communicate any potential international problems with the FCC’s proposed Open Internet regulations or the FCC’s consideration of reclassifying broadband and a Title II regulated telecommunications service.

As I have written before, and will highlight again because it is so very important, the international reaction to the FCC’s proposed reversal of longstanding U.S. competition policy has two huge ramifications.

  • Open Season on the Internet? To the extent the U.S. does not respect the boundaries of the U.S. constitution, rule of law, FCC authority, a legitimate problem, or supportable justification for a reversal of longstanding U.S. competition policy, FCC policy changes effectively would declare “open season” on the Internet by providing political cover for any despot that wants to further subjugate his people by clamping down on real Internet freedom in the name of so-called “Open Internet” regulations.
    • If the U.S. does not respect the boundaries that all free nations currently respect to keep the Internet free and open from Government control, the U.S. can expect no other nation to respect a free and open Internet. (SeeIs FCC Declaring Open Season on Internet Freedom?”)
  • Balkanizing the Internet? To the extent that the U.S. reverses policies that help keep the Internet universal, (i.e. the fundamental nature that most everything integral to the Internet is voluntary,) U.S. policies could unwittingly have the unintended consequences of “Balkanizing the Internet.”
    • If the U.S. sets the new precedent of going its own way without supportable justification that others around the world will believe and respect, the U.S. would be setting the example that the Internet should devolve into national internets controlled by national governments, and should not be the universal, voluntary, non-government-controlled Internet it is today and has been for the last two decades. (See: “Unintended Consequences: Balkanizing the Internet.”)

In sum, Mr. Feld’s irresponsible attack on freedom of speech, an honorable public servant doing his job, and the time-honored respect for diplomacy without intimidation of diplomats, signals that net neutrality is not really what FreePress/Public Knowledge say it is.

  • The focus on enforced orthodoxy of thought and fealty to the approved speech of their talking points — signals that FreePress’ and Public Knowledge’s vision of net neutrality — is more about government control of the Internet than true Internet freedom.

 

First there was one-to-many broadcasting, then many-to-many Internet narrowcasting… now it appears we are moving next to a one-to-many GoogleNet unicasting future…

  • …where every company and individual may simply become a subordinate channel on the Googleopoly advertising network,
  • and where content largely would be found only via Google’s mono-search guide…

To better understand this troubling ongoing transformation, connect the dots below…

  • Google TV:
    • NYT: “Google and partners take aim at the TV;” “The move is an effort by Google and Intel to extend their dominance of computing into television, an arena where they have little sway.”
    • WSJ: “Google pushes TV initiativeGoogle has been talking to partners about adapting — Android — the operating system it developed for cellphones — for TV’s and set-top boxes.”
  • Unicaster-friendly set-top box regulations:
    • FCC staff recently proposed a set-top box regulatory proceeding to ensure all video providers install a new gateway device whose “sole function should be to bridge the proprietary or unique elements of the network… to widely used and accessible open networking and communications standards.” (aka… the Google Android operating system)
  • Google-YouTube’s world-highest bandwidth usage:
    • Per the Register: “Google handles more internet traffic than all but two of the world’s ISPs, according to data from network-security outfit Arbor Networks.” … “The difference, of course, is that tier 1 ISPs handle traffic from myriad sources, including, well, Google. The Googlenet merely handles Google traffic.” “The story here is how quickly the nature of the Internet topology and landscape is changing.”
  • FCC support for Googleband:
    • The FCC Chairman praised Google’s announced testbed for ultra-fast one gigabit broadband. The only current potential use for that much bandwidth would be unicasting distribution of high definition video and interactive gaming by a dominant web video unicasting platform — Google’s YouTube…
      • Which has fourteen times more share than any web video competitor per Comscore data, and
      • Which inefficiently does not cache content closer to the user to avoid overloading the Internet backbone with billions of redundant high-bandwidth-intensive transmissions.
  • FCC proposed implicit subsidies for Google’s extreme and wasteful bandwidth use.
    • The FCC’s proposed Open Internet regulations clearly state in para 106: “…a broadband provider may not charge a content, application or service provider for enhanced or prioritized access to the subscribers of the broadband service provider…”
      • The effect of this sweeping proposed FCC edict would be to implicitly and massively subsidize Google, by prohibiting Google from having to pay ISPs commensurately for their world’s largest and fastest-growing Internet bandwidth usage and cloud computing business.
  • Google privacy arbitrage:
    • Google is not subject to current privacy laws (sections 222, 551 and the ECPA) that protect consumers’ video viewing habits and private information.
      • Thus, Google would uniquely be able to target advertising based on its unique ability to merge myriad user usage profiles from: Google search, YouTube, Reader, Books, gmail, Buzz, Voice, Latitude, Checkout, Analytics, AdSense, DoubleClick, etc.
      • Simply, Google is unique in having the world’s most intimate, comprehensive, and integrable user-profile-database of interests, desires, and intentions.
  • Google dominates search:
    • Google has 70% share in U.S. per DOJ, and 90% share in Europe per EU.
  • Google’s own telling public statements:
    • Google’s mission is to organize the world’s information and make it universally accessible and useful.” (website)
    • Search is critical. If you are not found the rest cannot follow.” said Google head of printing partnerships, Santiago de la Mora.
    • Ultimately, our goal at Google is to have the strongest advertising network and all the world’s information.” said Google CEO Eric Schmidt.
    • Advertising is the lifeblood of the digital economy.” said The Official Google Blog.
    • The brutal economic answer is that the Internet does in fact change other people’s businesses because of this massive distribution, ” he said. “We should just acknowledge that and not hide from it.said Google CEO Eric Schmidt.
    • “…the infrastructure means that Google can launch any new service at negligible cost or risk.” …”Its costs are mostly fixed, so any incremental revenue is profit. It makes good sense for Google to push into television and other markets, says Mr. Varian. Even if Google only gets one cent for each viewer (compared with an average of 50 cents for each click on the web), that cent carries no variable cost and is thus pure profit.” Google Chief Economist Hal Varian per the Economist.”
    • Anything that benefits the Internet ecosystem, benefits Google.” said Google’s head of industry relations,Peter Greenberger.

Simply, all these dots connect to Google positioning itself technologically, regulatorily, and business-wise to rapidly be the unicaster and uni-distributor of content on the Internet, whether it be video, books, news, blogs, maps, websites/webpages etc.

  • The open question is whether U.S. or EU antitrust authorities will intervene before or after it is effectively “game over” for digital information distribution competition.

***

For more in-depth information on this anti-competitive problem, see “Googleopoly IV: How Google extends its search monopoly into monopsony over digital information” or visit Precursor’s sister sites: www.GoogleMonitor.com and www.Googleopoly.net.